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Copperbelt Energy Corporation Plc (CEC) has launched a legal challenge against Konkola Copper Mines (KCM), accusing the mining company of unjustly withholding a 40 percent down payment of its $29,609,678.63 debt under the court-sanctioned Creditor’s Scheme of Arrangement (CSA).
Despite a court ruling mandating payments to creditors, CEC claimed KCM is using a pending appeal as an excuse to flout its obligations.
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KCM, however, contended that CEC’s appeal to the Court of Appeal undermines its compliance with the original ruling and insists that CEC cannot benefit from a situation it allegedly created.
In an affidavit filed in the Lusaka High Court, CEC’s Chief Financial Officer, Mutale Mukuka, detailed the company’s grievances.
According to Mukuka, the court had approved the CSA, directing KCM to allocate $225 million to settle debts with scheme creditors.
While other Class 2 creditors had started receiving their 40 percent down payments, CEC has been excluded, allegedly due to its ongoing appeal.
CEC’s Managing Director, Owen Silavwe, attempted to resolve the matter during a September 27 meeting with KCM management, but the company maintained its refusal to pay, citing the appeal.
Mukuka stated that the pending appeal did not concern KCM’s debt to CEC but rather the payment structure for the balance.
“The ruling of this court dated June 28 remains in full force and operational until altered by the Court of Appeal. There is no lawful justification for KCM to withhold payments owed to CEC,” Mukuka stated.
KCM, through its senior legal counsel, Glory Mwenya Chipota, argued that CEC’s appeal effectively places it outside the terms of the CSA.
Chipota referenced the Deed of Waiver and Release, incorporated in the CSA, which prohibits creditors from initiating lawsuits related to the arrangement.
KCM also claimed that it had yet to begin payments to Class 2 creditors due to ongoing validation processes and denied any court-mandated timeline for payments.
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